Bid to buy 'white' property with 'black' bucks

The decline in the growth forecast is largely due to the decline in agriculture sector which is expected to gr...Read More

Patna: In a last-minute bid to turn black money into white, many people are trying to dispose of large chunk of unaccounted cash in real estate. Several developers in Patna claimed they are being approached by people ready to buy flats even at exorbitant rates. However, most builders are rejecting such requests stating that old currency notes are of no use. "Few of my clients, who had earlier booked flats by paying initial booking money, are suddenly ready to pay the entire amount immediately. Besides, enquiries are pouring in for fresh purchases of property with full payment in cash. However, we are not entertaining such requests," said a senior office-bearer of Builders Association of India (BAI), Bihar. Another developer said queries for investing black money are also coming in from bureaucrats. "I have received big proposals from two bureaucrats in Patna, who want to make immediate investments in property. They want to make investments not in lakhs but in crores," the Patna-based developer said. "Purchases with black money normally used to happen for properties on the outskirts of Patna, like Bihta, Sonepur and Phulwarisharif. However, people are now making inquiries about purchasing flats even in central Patna where average official circle rate is above Rs50 lakh. Incidentally, those who are inquiring for such big purchases are ready to pay in cash," said another builder on the condition of anonymity. Some developers also expect that people who have invested black money in property will try to sell it off after a few months. "Many people buy property for the purpose of selling it off later, after appreciation in its value. Now that the black money in old notes of Rs500 and Rs1000 has become worthless, some people may try to sell off the assets after the dust settles," said Nanhey Kumar, former state convener of BAI, Bihar. According to industry experts, the real estate market is divided into two categories - primary and secondary. The primary market relates to purchase of land or flat for personal use, whereas the secondary market is used for stashing unaccounted money mostly in bulk purchase of property.

Patna occupies the centre stage in the real estate market in Bihar and its market size is approximately 10% of the state GDP. Till four years ago, Patna's real estate market was largely considered to be one of the most booming ones in the region. However, the realty market witnessed a slump after 2012 due to policy paralysis because of delay in final approval of building bylaws, master plan, and the corresponding delay in approval of building maps. The building bylaws were, however, approved in 2014 and the master plan got the government nod only on October 25 this year.